There is a flip on the market in 20851 right now that is guilty of all these sins.

I pleaded that he will have an opportunity to make money on this fix and that if I don't pay, he can put a mechanical lien on the property and if everything works out, every project in his territory is his.

Criminal Lawyers still have to STRONGLY represent their clients even if they think they are guilty as hell.  

So in the case of a multi with a single shut-off, it is better for the landlord to pay and collect from the tenant in order to avoid shut-off for those not guilty of missing the payment. 

I suppose the seller could try to plead ignorance, but if they've been served with papers by the City, that's wouldn't hold up in court.

I too have been guilty of "trusting" that someone is going to do you right.

and as mentioned you do have responsibility for due diligence just because a seller might be guilty of wrongdoing your damages might not exceed your legal fees

We were shocked to discover this contract (you have quoted above) had been found guilty in Rico Act violations, so we terminated our contract with him immediately. 

I don't understand the second part of this question, so I will plead ignorance before I definitively say 'no.'3) I am in the read everything I can get my hands on phase.

While we were not called on our wiring (I pleaded with the electrical inspector stating his plumbing colleagues have already bled me dry), we were called on the entire wiring for 1 unit as there were electrical boxes hidden behind drywall for each and every fixture. =$5k for upgrade and $4k for wiring in one unit.